ANCHORAGE, Alaska - Electronic bill payment and presentment is often referred to as the "paperless round-trip" for consumers. Denali Alaskan FCU is trying to ride that round-trip into a successful bill payment/presentment CUSO. Electronic bill payment and presentment hasn't caught on in the financial sector as fast as the other online solutions (Internet banking, lending, brokerage, etc.), but analysts say EBPP could take off as large companies look to improve their bottomlines. Basically, EBPP involves presenting a consumer's bills electronically, and then providing the means to pay the bills electronically. According to bill pay giant CheckFree, Atlanta, U.S. businesses send or receive some 26 billion bills, account statements and payments a year. The U.S. Postal Service said it costs these business about $17 billion just in postage to mail these items. When printing is factored in the average price of a paper bill can cost anywhere from 85 cents to $1.50. By comparison, estimates for paying, sending and receiving bills via EBPP max out at about 57 cents per bill, and it can be much less. Businesses could cut their costs by one-third or more using EBPP, saving millions of dollars a year collectively, according to CheckFree's estimates. Denali is looking to get in on EBPP early through its SpeedBill.com CUSO. The credit union is now trying to convince its large SEGs, which print thousands of bills a year, such as phone company Alaska Communications Systems, that they can save a lot of money using EBPP. While it's a high-tech solution, it isn't difficult for the billers to convert to EBPP, said Keith Fernandez, marketing director at Denali Alaskan FCU. "We accept the billers' print stream exactly as if it was going to the printer. Nothing changes on that end. Instead of paper, we convert the print stream into digital bill images." Once the SpeedBill.com server converts the biller's print stream into digital images, it e-mails the data to what is basically an electronic post office, known as PaySense. The consumer then receives an e-mail indicating that they have a bill waiting for them in their electronic PaySense mail box. The user uses free bill software to pick up their bills. The user can then review their bills and make payments. Once the bill is picked up from the mail box it is automatically deleted from PaySense. The SpeedBill.com server sends the payments from the user's bank or credit union account and then updates the user's bill records on the biller's host server. Despite all of the different players interacting electronically, security is tight, said Fernandez. One of the reasons is the limited use of the Web. SpeedBill e-mails users their bills for them to retrieve on their own. The bills are not stored on a Web site like many other EBPP providers. Not warehousing the bills after delivery makes PaySense a less attractive target for hackers, said Fernandez. Users can import the bill information into Quicken or Money to manage them from their PC, not a Web site, said Fernandez. That's key, he said hackers want account data to go after. When customers of a biller that uses SpeedBill.com sign up for the service, the biller will no longer mail them paper bills-that's where the cost savings comes in. Of course users can also print a version of the electronic bill if they want a hard copy, said Fernandez. Getting billers to convert to EBPP is the first part of the challenge. Next a large number of the biller's customers have to be enticed by EBPP if the biller is going to save significant printing and postage costs, said Fernandez. Fernandez said that might be easier to do in Alaska than in other states because about 70% of Alaska residents are on the Net. "There's tremendous adoption of Internet and electronic delivery in Alaska. One reason is that Alaska is so spread out. If you can do business via the PC, there's great convenience there," said Fernandez. He also said the weather can limit people's movements out of their homes, so the Web can give Alaskans some electronic movement via the Web. Fernandez admitted that from earlier talks with other credit unions, he's not so sure credit unions are ready to become early adopters of EBPP. "I don't think credit unions are thinking about it yet," he said. -
pgentile@cutimes.com
